More backing for Rio cash-raising

A call for cash by Rio Tinto has seen a strong take-up from its existing Australian shareholders - a day after similar success in the UK.

The mining giant saw 95% of the heavily discounted shares available in Sydney taken up. It had earlier reported a 96.97% take-up of London shares.

The firm was trying to raise $15.2bn (£9.3bn) in its dual listings.

Rio Rinto is seeking to reduce the $38bn of debt it took on to buy the Canadian aluminium group Alcan in 2007.

'No-brainer'

In February, the Anglo-Australian firm announced that it would be receiving a $19.5bn investment from China's Chinalco, which would have increased its stake in Rio to 18% from 9%.

However, in June, Rio Tinto said it was scrapping the deal with Chinalco in favour of a tie-up with rival giant BHP Billiton, and also announced its plans to raise funds from investors.

Chinalco remains Rio's biggest shareholder, and on Thursday, Rio confirmed that the Chinese firm had taken up its full entitlement of new shares in the rights issue.

"It's positive that the rights issue has been completed - it certainly takes a lot of stress off the balance sheet," said Michael Bush, head of credit research at National Australia Bank.

"It was a fairly heavily-discounted rights issue so it was a bit of a no-brainer in terms of whether people should take it up. It's positive for Rio that the money's in the door and they can now pay down debt."

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